Benefits of cryptocurrency-WWNEED.COM
Digital currencies are a new asset class that emerged with the creation of the Bitcoin blockchain in 2009, which has the advantage of allowing peer-to-peer transactions rather than being tied to a central authority. These characteristics that characterize the nature of digital currencies have led to many benefits associated with them. Read the article to learn about the importance and most prominent benefits of the digital currency, which will inevitably encourage you to invest in it.
Benefits of digital currencies
1- Ease of transactions
One of the benefits of digital currencies is that they allow transactions to be carried out easily and in a more private way than most traditional transactions, and all this at a very low cost. For example, you can buy some types of digital currencies such as Bitcoin, Litecoin, and Ethereum with cash in a Bitcoin ATM, then you can easily send it to your phone, and anyone can send and receive a variety of digital currencies using a simple smartphone.
2- Strict security measures
Cryptocurrencies offer very secure payment methods due to the fact that they are based on cryptography and blockchain security. The security of cryptocurrencies is usually measured by the hash rate, the higher the latter, the more computing power it takes to hack the network. Bitcoin is the most secure digital currency with a hash rate higher than any other network.
Remember that investing in digital currencies is very similar to investing in the stock market, that is, hacking incidents that may occur are the result of human errors or a security defect in the transaction itself.
3- Short repayment times and low fees
What attracts people to digital currencies is not only the investment, but even the ability to use them as a medium of exchange. Bitcoin and ether transactions do not cost a few dollars, and you can send many other cryptocurrencies such as Litecoin, XRP, and others for very little money. This is in addition to the imaginary payment speed, as payments for most digital currencies are settled in seconds.
4- The rapid growth of the industry
The digital currency industry is among the fastest growing industries today, as it follows the path of the leading companies in the Internet in the 1990s and early 2000s in terms of rapid spread.
The total market capitalization of the cryptocurrency market in 2013 was about $1.6 billion, and it rose to more than $1.4 trillion in late 2021.
5- Huge returns
Bitcoin has been the best performing asset over the past 12 years, and it has jumped from being worthless to being worth tens of thousands of dollars. Despite the hype surrounding Bitcoin, there are many proven altcoins out there, so don’t limit yourself to just one.
This volatile characteristic of digital currencies is one of its most important benefits that attract traders and speculators.
6- Private Transactions
Although privacy is one of the most popular benefits of cryptocurrency, encryption is not quite as private as some might think. Blockchains create a public ledger that records all transactions. While this ledger only displays wallet addresses, it is possible for observers to track transactions. This is where cryptocurrency mixing services bundle transactions together in such a way that they are difficult to distinguish from one another, confusing outside observers.
So while there is no absolute privacy, transactions are still more private than using traditional fiat currencies.
7- Portfolio diversification
Cryptocurrency markets operate independently of other markets, which means that what determines their price movement is different from the factors that affect the prices of stocks, bonds, and commodities. But this does not mean that you cannot diversify your portfolio by trading in stocks and other investments along with cryptocurrencies.
8- Hedging against inflation
One of the most important benefits of digital currencies is that they protect you and your money from the risk of inflation. What usually leads to monetary inflation is central banks and governments printing money more than necessary, so the value of things increases when they are scarce. Currencies such as Bitcoin have a limited supply, ensuring that they are scarce and highly valued regardless of the fluctuations in monetary policy.
9- Cross Border Payments
One of the most important benefits of digital currencies is that they do not take into account national borders. Anyone in any country can easily send digital currencies to another person, regardless of their geographical location. This process, when completed through traditional financial services, may take a long time and exorbitant fees, and it may be impossible at times due to the tensions between certain countries.
10- Comprehensiveness of the financial system
Some of the benefits of digital currencies extend to people who do not have access to the traditional financial system, as anyone can participate in them without permission from any financial authority or government and without the need to own a bank account. All you need to enter this field is a smartphone.
11- Freedom of transactions
One of the great benefits of digital currencies is that they can be used to exchange value between two parties without the need for any third party, which makes transactions more free and resistant to censorship.
Unlike traditional banks that have the freedom to exclude some people, such as some journalists, political opponents, or others, from benefiting from their services, digital currencies allow freedom for both people, regardless of their identity, to use them.
12- Markets 24/7
Stock markets are open on weekdays during normal business hours from 9:30 am to 4:30 pm only, while cryptocurrency markets are open 24 hours a day, seven days a week, without exception. The only things that can hinder a person’s ability to trade in cryptocurrencies are power outages or internet outages.
The importance of digital currencies
As mentioned earlier, cryptocurrencies refer to virtual currencies that consist of codes and work just like other mediums of exchange like US Dollars, Sterling Pounds, Euros, etc. What distinguishes digital currencies and highlights their importance is that they are the first to allow electronic transactions between two parties without the need for a third party or a trusted intermediary.
In the year 2008, Satoshi Nakamoto introduced the first digital currency known as Bitcoin which revolutionized the world of financial system. In addition to being the first to introduce peer-to-peer transaction technology, it employed a Bitcoin Ledger referred to as Block Chain that settles and stores all transactions of the Bitcoin economy.
Unlike other monetary systems, the blockchain is not controlled by any central authority, rather it operates via public documents that are distributed peer-to-peer across thousands of nodes in a network making it easy to track digital exchanges and prevent fraud. There are more than 700 forms of digital currencies such as Dogecoin, Litecoin, Blackcoin, Auroracoin, Coinye, Decred, Dash, Ethereum, etc.
The importance of digital currencies is evident in the following points:
- Digital currencies are safe, reliable, and transparent, and cannot be arbitrarily counterfeited or reversed by the sender as is the case with traditional credit cards.
- Digital currencies eliminate the need for a third party investment and protect your wealth from capital controls.
- Cryptocurrencies have a high degree of privacy, as transactions remain undetected and anonymous, which attracts consumers who prefer anonymity and privacy.
- Cryptocurrency encourages what is referred to as low cost banks, you can do exchanges from anywhere as long as there is access to a mobile phone.
- Cryptocurrencies use a “payment” mechanism that allows the owner to send exactly what they want to the merchant or recipient without revealing too much information.
- Transaction fees are usually very minimal.
- Unlike any other electronic cash system where you are subject to a company that manages your account, cryptocurrencies allow you to fully own your account.
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